clarity

According to CoinDesk, the Clarity Act, aimed at establishing a clear regulatory framework for cryptocurrency in the United States, has been declared a failure after months of intense negotiations. The bill was originally intended to address the definition of digital assets at the federal level, but it failed to reach the final voting process due to fierce interest group conflicts.Multiple sources indicate that the core reason for the legislative collapse lies in complex jurisdictional conflicts and disputes over terms. The CFTC (Commodity Futures Trading Commission) and SEC (Securities and Exchange Commission) are in disagreement over the management rights of certain digital assets, while lawmakers also struggle to reach a consensus on how to define the legal attributes of NFTs, DeFi protocols, and stablecoins. Despite calls from organizations to eliminate market uncertainty through legislation, a key compromise proposal ultimately could not be reached.The Fintech Association and other industry organizations had previously lobbied actively in support of the bill, hoping to establish clear industry standards. With the failure of this legislation, traditional financial institutions on Wall Street and cryptocurrency projects will continue to face legal gray areas, and the industry's compliance process will thus be forced to delay.

Patrick Witt, the Executive Director of the White House Digital Asset Advisory Committee, defended President Trump's cryptocurrency connections at the Financial Markets Quality conference held at Georgetown University on Wednesday, denying that his personal crypto interests led to the failure of the Clarity Act in the Senate last week. He stated that the Democrats have politicized the issue and questioned why the recently passed housing bill did not require strict government ethics review provisions. The negotiations for the Clarity Act have consistently failed to bypass ethical controversies, which target conflicts of interest in cryptocurrency held by senior government officials, with Trump being a primary target.Witt stated that Trump agreed to two unprecedented ethical provisions: in addition to ultimately being willing to accept rules mandating the divestment of crypto assets or placing them in a blind trust, the White House is also prepared to concede by allowing state attorneys general to sue him if the federal government fails to address ethical violations. He also mentioned that the accusation of Trump having a conflict of interest while controlling crypto assets and leading digital asset policy is "quite ironic," as several senators on the banking committee involved in the discussions hold and actively trade stocks of financial services companies they regulate.Witt's main responsibility is to push the Clarity Act into law, which faced setbacks in the Senate last week. He stated at the CoinDesk policy and regulatory event on Tuesday that the focus is not on the year-end lame duck session, but rather on the core work shifting towards federal regulatory agencies like the Securities and Exchange Commission. He also accused banking lobbyists of pushing to shelve the bill due to concerns that stablecoin rewards might compete with interest-bearing bank deposits, claiming that this opposition was initiated by large banks and spread to community banks.

Renowned trader Killa stated, "The 'Everything is Priced In' chart records the major catalytic events in each cycle of Bitcoin, as well as the price performance after these events occur." He believes that during bear markets, negative news typically drives BTC to continue falling, leading traders to gradually form the habit of "shorting on bad news"; however, when the high time frame trend reverses, the same news may only cause temporary panic, after which Bitcoin absorbs the selling pressure and continues to rise.Recently, the market has experienced the Federal Reserve's interest rate hikes, the voting expectations for the CLARITY Act, and the failure to advance the act. At one point, the market viewed these events as reasons for Bitcoin to decline further, but BTC only briefly fell below the range's low point, quickly rebounding and showing strong resilience. Even when narratives related to a "Third World War" intensified, Bitcoin began to respond relatively positively to panic factors in terms of price. He believes this performance is a significant distinction between bull and bear markets: in a bear market, bad news drives prices down, while in a bull market, bad news may prompt traders to capitulate, after which prices continue to rise.Killa noted that the important catalyst confirming the continuation of the last cycle was the approval of the spot Bitcoin ETF, while a similar catalyst for this cycle may be the CLARITY Act. Bitcoin's recent ability to digest multiple pieces of bad news is an important basis for his judgment that the trend has already changed.

Founder of Strategy Michael Saylor stated: The digital asset industry is better off with supportive rules from the SEC, CFTC, Treasury, and banking regulators than accepting the limitations in the final CLARITY compromise. The safest path is to create products that satisfy customers and deploy them widely, allowing people to have a stake in innovation. Ownership should be protected, honest disclosure required, and fraud punished, then let entrepreneurs compete and grow.Saylor mentioned that the September CLARITY compromise would have restricted covered providers to only paying customers for holding stablecoins while allowing qualified activity rewards, and directed the Treasury to limit certain rewards when a significant harmful deposit transfer to community banks was identified. The GENIUS Act has included restrictions on issuers paying interest and returns on stablecoins. The innovation sandbox of CLARITY would have limited participating companies to 25 employees, with each committee approving 20 projects per year. The SEC provided conditional relief for on-chain trading of certain tokenized stocks on September 17, and the CFTC chairman committed to using existing authority while the bill is stalled.He pointed out that useful products should be scaled by 2027 and 2028, transforming temporary relief into permanent rules. The goal is to have 50 million American voters using digital financial products that improve their lives. The best protection for digital innovation is the public that benefits from it.

Coinbase co-founder and CEO Brian Armstrong stated that The Wall Street Journal is writing a report blaming the failure of the CLARITY Act on Coinbase and himself. He mentioned that the newspaper has repeatedly taken an adversarial stance towards CLARITY in related reports and echoed the views of banking lobby groups.Armstrong stated that in January of this year, he opposed a draft that was about to be submitted for committee vote due to significant issues in areas such as DeFi, tokenization, CFTC authority, and stablecoin rewards, which could harm the crypto industry, and that support was scattered and difficult to pass. Afterward, multiple parties modified the draft, and about four months later, the version submitted to the committee had addressed the aforementioned four issues. He expressed that the final draft submitted to the Senate is good and he strongly supports it, and will continue to advocate for clear rules that treat crypto fairly.

Tom Lee, Chairman of the Ethereum treasury company Bitmine, stated in an interview that even if the CLARITY Act fails to pass, the cryptocurrency market may continue to rise, as market demand is more important than any single piece of legislation. The CLARITY Act was originally intended to establish a clearer regulatory framework for the cryptocurrency industry and to give the Commodity Futures Trading Commission (CFTC) more defined regulatory responsibilities.Even if the bill fails, the Securities and Exchange Commission (SEC) and CFTC will continue to serve as the primary federal regulatory agencies for the cryptocurrency industry. Tom Lee also cited the prediction markets and sports markets as examples, noting that these areas continue to grow despite regulatory uncertainties.

CoinShares pointed out in its latest research report that the Federal Reserve's hawkish policy shift and the stalled CLARITY Act are the two major short-term pressures facing the current cryptocurrency market. The report states that the Federal Reserve believes inflation is still too high, and the latest interest rate forecasts no longer indicate any room for rate cuts before 2027, which has supported the dollar and short-term U.S. Treasury yields. Coupled with the Iran conflict driving up energy prices, the possibility of another rate hike within the year has increased.CoinShares believes that if the inflation outlook does not improve significantly or if there is no major shift in monetary policy expectations, it may be difficult for Bitcoin to effectively break through $80,000 before the end of the year. In terms of regulation, the main disagreements regarding the CLARITY Act still focus on ethical provisions, with a revised version possibly being pushed forward as early as next year. Due to Bitcoin's relatively clear regulatory status, the stalled act has limited impact on it, while Ethereum and other altcoins face greater regulatory uncertainty.

The U.S. cryptocurrency market structure bill CLARITY did not receive the required 60 votes in a procedural vote in the Senate, with a result of 49 to 50. The bill is not yet dead, as Republican lawmakers retain the option to reconsider the motion, but there are significant disagreements between the two parties on the ethical provisions related to Trump’s digital assets, and the legislative window continues to narrow.

Crypto In America host Eleanor Terrett reported that seven Democratic senators, including Kirsten Gillibrand, Mark Warner, Ruben Gallego, and Angela Alsobrooks, stated that they are "committed to passing the Clarity Act in a bipartisan manner."This statement comes as both sides are making initial efforts to restart bipartisan negotiations and assess the willingness of all parties to return to the negotiating table and push for the passage of the Clarity Act before the end of the year. This information comes from three informed sources.

According to The Block, JPMorgan analysts stated that the Clarity Act is "not completely dead" after failing the procedural vote in the Senate, but the window for passing it before the end of this congressional session is "extremely narrow."Analysts expect the focus to shift to the rule-making of the SEC and CFTC, noting that the durability of institutional rules is not as strong as laws passed by Congress.

According to Cointelegraph, Bernstein analysts stated that after the failure of the CLARITY Act to pass the Senate procedural vote, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are expected to "actively and swiftly" advance the formulation of digital asset regulations to make up for the time spent on previous bill negotiations.Bernstein anticipates that the new regulations may cover token classifications for financing, protective measures for DeFi and self-custody protocol developers, exemptions for stock tokenization innovations, expedited approvals for perpetual contracts of real-world assets, and revisions to rules related to sports event contracts and their swap classifications. Relevant agencies may provide additional regulatory clarity for the industry through administrative rules.Analysts believe that the CLARITY Act could have reduced the risk of the regulatory framework being adjusted with changes in the political environment through legislation, but due to limited remaining legislative time and controversies over ethical provisions, the likelihood of the bill being voted on again is low.The SEC had previously proposed a new framework applicable to certain crypto asset investment contracts, intending to allow entities to issue tokens not exceeding $5 million within 4 years, or tokens not exceeding $75 million within 12 months, and set up safe harbor arrangements. SEC Chairman Paul Atkins had also stated that if Congress fails to pass the CLARITY Act, the agency has the ability to formulate digital asset rules on its own.

Founder of Strategy Michael Saylor stated that as the CLARITY Act faces obstacles, he expects the U.S. Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Treasury Department to continue advancing digital asset regulatory rules based on existing laws, without waiting for Congress to complete legislation.Saylor anticipates that banks will expand Bitcoin custody and Bitcoin-collateralized loan services, with more funds flowing into Bitcoin and digital credit. He added that the GENIUS Act will support further adoption of stablecoins, and the development of the crypto industry does not need to be paused due to the stagnation of the CLARITY Act.

CZ reposted a summary from the founder of Compound regarding the failure of the CLARITY Act to pass the Senate procedural vote on platform X and stated that if there is one positive aspect, it is that stablecoins can still continue to provide yields.CZ mentioned that there will always be setbacks in the process of moving forward, but technological advancements will continue to progress.

Overseas cryptocurrency KOL Brady Dale posted on X, stating that there are three responsible for the failure of the "CLARITY Act": first is Trump, due to his launch of the TRUMP token; second is Tim Scott, who insisted on having the Senate waste time drafting its own version, depleting the legislative momentum that remained after the passage of the "GENIUS Act"; third is Cynthia Lummis. Brady Dale mentioned that he believed last fall that the bill would be difficult to advance, and after Cynthia Lummis announced her retirement, the bill became completely hopeless.He believes that the Chairman of the U.S. Securities and Exchange Commission, Paul Atkins, will still alleviate the related impacts to some extent, but the movements of that day were not surprising, as the goal was merely to redirect the cryptocurrency political action committee Fairshake towards October.